China Unicom posted a strong rise in profit for the first six months of the year, as its mobile business recorded nearly 10 per cent growth after ARPU stabilised.

The operator continued an upward earnings trajectory with a 145 per cent year-on-year increase in net profit to CNY5.9 billion ($854 million), on consolidated revenue of CNY149 billion, up 7.9 per cent from H1 2017. Service revenue grew 8.3 per cent to CNY134 billion, driven by a 9.7 per cent increase in mobile service turnover to CNY84.3 billion.

In its earnings statement, the company said the growth rate exceeded the industry average by nearly 8 percentage points. The increase came despite the cancellation of domestic mobile data roaming fees in 2017, a move chairman and CEO Wang Xiaochu said the operator had prepared for by “optimising tariff packages” and promoting “heavy data packages”.

He noted the unit pricing for mobile data services decreased substantially year-on-year during H1, while mobile data consumption volume grew.

Data leads
Mobile data revenue grew 23.8 per cent year-on-year to CNY53.9 billion. Revenue from non-voice services (fixed and mobile internet) increased 14.8 per cent to CNY110 billion, representing 82.1 per cent of service revenue (up from 77.1 per cent in H1 2017). Mobile equipment sales rose 4.5 per cent to CNY14.7 billion.

The operator added 64.2 million 4G subscribers compared with end-June 2017, taking its total to 203 million: 4G penetration rose from 51 per cent to 67 per cent. Its total subscriber base increased 12 per cent year-on-year to 302 million.

Mobile ARPU held steady at CNY47.90.

Full year outlook
Wang cited continued downward pressure in its traditional businesses, the end of domestic mobile data roaming and the escalation of market competition as factors which “will collectively impose challenges for the company’s development” in H2.

Capex for the full year is forecast to increase to about CNY50 billion from CNY42 billion in 2017. It targets adding another 50,000 4G base stations in H2 after deploying 60,000 in the opening six months, which left it with 910,000 in total at end-June.

The company also announced Li Fushen, who previously served as an executive director and CFO, stepped down as CFO and was replaced by Zhu Kebing.